Labour's financial dependence on the trade unions has been exaggerated

Just 25 per cent of the party's funding so far this year has come from affiliated unions, with party members donating most.

The GMB's decision to cut its affiliation fees to Labour from £1.2m to £150,000, in advance of Ed Miliband's plan to introduce an opt-in system for trade union members, has refocused attention on the party's relationship with the unions.

Judging by David Cameron's rhetoric, it would be easy to believe that Labour is entirely dependent on them for funding. But while it's true that the latest Electoral Commission figures show that affiliated unions were responsible for 77 per cent (£2.4m) of all donations to the party in Quarter Two, the true picture is more complex. 

The Electoral Commission doesn't publish donations below £7,500, so the funding Labour receives from its 187,537 members isn't included. In reality, as the table below shows, just 25 per cent of Labour funding so far this year has come from affiliated unions, with 29 per cent from members' subs, 22 per cent from grants and 25 per cent from fundraising and commercial sources. 

Labour will certainly suffer a major funding hit from Miliband's union reforms. The party expects around 10 per cent of the existing 2.7 million levy-payers to opt-in, which would reduce the amount it receives in affiliation fees from £8m to around £1m (although it is likely to increase the annual £3 payment). But its dependence on the unions has been much exaggerated.

Unite general secretary Len McCluskey. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
Show Hide image

Cabinet audit: what does the appointment of Liam Fox as International Trade Secretary mean for policy?

The political and policy-based implications of the new Secretary of State for International Trade.

Only Nixon, it is said, could have gone to China. Only a politician with the impeccable Commie-bashing credentials of the 37th President had the political capital necessary to strike a deal with the People’s Republic of China.

Theresa May’s great hope is that only Liam Fox, the newly-installed Secretary of State for International Trade, has the Euro-bashing credentials to break the news to the Brexiteers that a deal between a post-Leave United Kingdom and China might be somewhat harder to negotiate than Vote Leave suggested.

The biggest item on the agenda: striking a deal that allows Britain to stay in the single market. Elsewhere, Fox should use his political capital with the Conservative right to wait longer to sign deals than a Remainer would have to, to avoid the United Kingdom being caught in a series of bad deals. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.